Trump’s Venezuela oil meeting starts with few concrete promises

U.S. President Donald Trump met with oil executives in Washington on Friday to push for major investment in Venezuela.

But no major financial commitments were immediately made at the meeting, with the head of Exxon Mobil warning that the South American country was currently “not for investment.”

Trump has said he expects big oil companies to pour “at least” $100bn (£75bn) into the country, but industry analysts have warned that many companies will be reluctant to get into a situation where significant risks remain.

Last week, the United States arrested Venezuelan leader Nicolás Maduro, who is currently being held in a New York prison.

Maduro’s second-in-command, Vice President Delcy Rodriguez, is seen as a pragmatist and now serves as interim president.

Executives at the largest U.S. oil majors in attendance acknowledged that the United States, with its vast proven oil reserves, represents a major opportunity.

But at a news conference with Trump, they warned that they would need to see significant changes within Venezuela, as well as a welcome from the local government and people, to make it an attractive place to invest.

“Our assets have been seized twice, so you can imagine that a third re-entry would require some pretty significant changes to what we’ve seen historically and where we are currently,” Exxon Mobil CEO Darren Woods said. “Today it’s uninvestable.”

Venezuela has had a complicated relationship with international oil companies since oil was discovered within its borders more than a hundred years ago.

Chevron is the last major U.S. oil company still operating in the country, while a number of companies from other countries, including Spain’s Repsol and Italy’s Eni, sent representatives to the White House meeting.

Exxon Mobil and ConocoPhillips, also in attendance, have been fighting to recoup billions of dollars they say they are owed after the 2007 nationalization of assets.

Trump has raised the issue several times this week to justify his intervention, including on Friday, but he downplayed the possibility of an economic recovery at the meeting, echoing comments from other administration officials in recent years who have said repaying these debts is not a priority.

“We’re not going back,” Trump said. He said his government would work to reach a “deal” with businesses to turn his vision to revitalize the industry into reality.

Venezuela has some of the largest reserves in the world.

But its production has fallen sharply in recent decades due to reduced investment and poor management – not to mention U.S. sanctions, which have limited its access to global markets.

The country’s output is currently about 1 million barrels per day, accounting for less than 1% of global supply.

The White House said it was working to “selectively” lift the restrictions, but Trump officials have also made clear they intend to impose controls on Venezuelan oil sales as a way to maintain influence over the Venezuelan government.

The United States this week seized several oil tankers carrying sanctioned crude oil. U.S. officials said they were working to set up a sales process that would deposit the funds raised into U.S.-controlled accounts.

“We’re open for business,” Trump said.

Chevron said it expected to increase production from current levels, while ExxonMobil said it was working to send a technical team to assess the situation in the coming weeks.

Repsol currently produces about 45,000 barrels per day, and the company said it would triple its output in Venezuela over the next few years if conditions are right.

Executives at other companies also said Trump’s promises of change would encourage investment and they wanted to seize the moment.

“We’re ready to go to Venezuela,” said Bill Armstrong, who leads an independent oil and gas drilling company. “As far as real estate goes, it’s prime real estate.”

But analysts say it will take a huge effort to meaningfully increase production.

“They’re trying to be polite and supportive as they can, but they’re not putting any real money into it,” said David Godwin, president of energy consulting firm Godwin Global Strategies and a former U.S. State Department special envoy for international energy affairs.

Godwin said major oil companies such as Exxon Mobil and Shell “would not invest billions, let alone tens of billions,” without physical security, legal certainty and a competitive fiscal framework.

“From an industry perspective, it’s not popular,” he said. “The conditions weren’t quite right.”

However, he added that smaller companies may be more eager to join in and help boost Venezuela’s oil production next year. But those investments are likely to hover in the $50 million range, a far cry from Trump’s “fantasy” $100 billion figure.

Rystad Energy estimates that $8 billion to $9 billion in new investment per year will be needed by 2040 to triple production.

Claudio Galimberti, the company’s chief economist, said Trump’s proposal to invest $100 billion in Venezuela could have a significant impact if it comes to fruition.

He said investments of this scale were only possible with subsidies and political stability.

“It will be difficult to see major commitments until the political situation is completely stable, and it’s anyone’s guess when that will happen,” he said.

Additional reporting by Daniel Kay